Larger companies are responsible for deciding…and for paying their tax!
In April 2021 larger companies* became responsible for deciding the status, and then paying the PAYE / NIC, of all individuals they contract with through what’s commonly called a ‘personal service company’ or PSC, or what some refer to as “disguised employees” or “permatractors”.
This process all started with new legislation (called IR35) designed to combat tax avoidance from individuals who provide services through intermediary companies, usually a limited company, but who would otherwise be deemed an employee. HMRC have struggled to enforce this legislation and therefore the new legislation shifts the responsibility to the business receiving the services of the individual. From April, these businesses became responsible for:
By ignoring these new rules and not operating the payments correctly, there could be significant tax consequences for your business, so we are advising all companies (who fall into the criteria) to review contracts as soon as possible.
Your next steps:
2) Further information is available in our FREE IR35 GUIDE (click here to download), which explains the legislation and criteria in more detail, and provides examples for reference.
Alternatively, if you require assistance or wish to discuss this further, please contact our Tax Director Stephen Oates by email or on 0141 221 2984.
* The criteria for larger companies who will be responsible is anyone with a turnover greater than £10.2m, a Balance sheet total over £5.1m or a firm who has over 50 employees.
Partner and Head of Personal Tax
Hazel began her training as an Accountant in 1992 and joined French Duncan in 2012 when they merged with Macfarlane Gray. She has specialised in tax for more than 20 years and heads up the personal tax compliance and consultancy team, managing a varied client base of businesses and private clients.
Hazel has previously served as the Scottish President of the Chartered Association of Certified Accountants for two years and is currently a member of the Scottish committee.
Hazel’s specialisms include capital taxes planning, personal tax planning including residence matters, advising owner-managed businesses, tax investigations and property taxation. She has particular interest in the construction and agricultural sectors.
Hazel was brought up in a family business and has a deep understanding of the issues surrounding owner-managed firms. She draws on this background when advising on commercial and tax matters.
0131 225 6366
0131 225 6366
Stephen began his career working for a short time at HM Revenue & Customs as an Administrative Officer before joining an independent CA practice as a tax assistant dealing with all tax compliance issues and identifying tax planning opportunities. Three years later, he was appointed as tax manager to a mid-tier accountancy practice, where he remained for six years, before joining French Duncan in 2015 in the same role.
Stephen has gained extensive experience of working for both personal and corporate tax clients which helps him give more comprehensive tax advice. Stephen has gained exposure throughout his career to all aspects of Employment taxes and has added to this expertise through completing numerous Employment tax review and due diligence reports. Stephen has also been heavily involved with giving advice, both technical and compliance based, on all aspects of employment related securities which covers both tax advantaged scheme such as EMI, SIP, CSOP and non-tax advantages schemes.